The state that contains the northernmost, westernmost, and easternmost points in the US, its “final frontier,” is certainly a destination for adventurers. With a coastline totaling more miles than all other states combined, and 17 of the 20 highest peaks in the nation, Alaska boasts a truly unique environment and incredible natural beauty.1

It’s also a promising place to start a business. According to its 2020 Small Business Association Profile, small firms make up over 99% of business in the state and employ over half (52.4%) of its workforce.2 But for your business to make it up in Alaska, you’ll need more than a heavy coat and sunglasses—you also need to be insured.

Alaska business insurance requirements

Business and personal insurance in Alaska fall under the jurisdiction of the Department of Commerce, Community, and Economic Development (DCCED), specifically the Division of Insurance.

As with most other states in the country, there are two main forms of insurance oftentimes required for businesses in Alaska:

  • Workers’ compensation
  • Auto liability insurance

But, just like in other states, these two forms of insurance are not the only kinds your business should consider to operate in Alaska. In the sections that follow, we’ll take a deep look at the requirements first, then look at some additional, recommended coverages that Alaska businesses can benefit from!

Alaska workers’ compensation insurance

Workers’ comp in Alaska is governed by the Alaska Workers’ Compensation Act. Most businesses that have one or more employees, except those that meet certain requirements, need to carry workers’ comp insurance. This protects the business (and workers) from the one-two punch of financial harm that can accompany workplace injuries.

There are exemptions from workers’ comp coverage in Alaska, pertaining mostly to certain business organizational structures and workers in niche fields:

  • Companies approved to self-insure
  • Sole proprietors and partners (owners)
  • Executives with at least 10% ownership interest
  • Ammateur sports officials and professional hockey teams
  • Some taxicab and “transportation network company” drivers
  • Contract entertainers, commercial fishers, and real estate agents
  • Certain domestic and agricultural workers (baby sitters, cleaners, etc.)3

Alaska workers’ comp matters are handled by the Department of Labor and Workforce Development (DOLWD), Division of Workers’ Compensation.

Auto insurance for businesses

All drivers in Alaska need to carry liability insurance, so if you’re driving a car for work, that means you likely need to be covered, too. Auto insurance in Alaska is governed by the Department of Administration (DOA), Division of Motor Vehicles (DMV).

Alaska’s Mandatory Insurance Statute, 28.22.101, sets forth the following minimums:4

  • $50,000 dollars for bodily injury or death, per person
  • $100,000 dollars for bodily injury or death, per accident
  • $25,000 dollars for property damage liability, per accident

Failure to carry proof of proper insurance while driving will result in the suspension of your license; In Anchorage, your car may also be impounded by the Municipality.5

These minimums apply to both personal and business vehicle owners, nearly everywhere in Alaska. If your business itself is the owner of a vehicle and depends on said vehicle for business, you probably need commercial auto insurance. But in some cases, a personal vehicle (owned by the individual) used for business can be covered by your personal auto insurance.

Other types of Alaska business insurance

Even if your business satisfies all applicable legal requirements for workers’ comp and auto liability insurance, you may not have all the coverage you need. Depending on the industry you work in, there may be other forms of insurance that specific regulations or laws require you to carry, or that clients and customers expect you to carry.

Some of the most important kinds of insurance for all Alaska businesses to consider, beyond the particular legal requirements in state, include:

  • General liability insurance
  • Professional liability insurance
  • Equipment Insurance (also known as inland marine insurance)
  • Commercial property insurance

Of these coverages, the most important are general liability and professional liability insurance. Let’s take a closer look at each and why you should consider them for your Alaska business!

General liability insurance in Alaska

General liability insurance is an essential baseline coverage. When your work involves regular face-to-face meetings with clients, in your own office, or any other third-party location, a lot of risks exist. If an accident happens, and the third party is hurt, they could sue you. That’s where general liability insurance comes in.

General liability insurance can provide investigation and defense, as well as help to cover damages for third-party claims related to:

  • Bodily injury
  • Property damage
  • Personal and advertising injury

Importantly, general liability coverage concerns damage to a third party or their property—not your own (first-party) property. If you want additional protection for the tools of your trade, you should consider Business Equipment Protection (also known as inland marine insurance).

Professional liability insurance in Alaska

Any business that involves expertise can benefit from professional liability insurance. In some cases, such as for doctors and lawyers, it may be legally required.

If your work involves providing a specialized service, like photography or consulting services, your client may claim that an error you made wronged them and caused them financial loss. That’s where professional liability coverage comes in.

If a client alleges that you were negligent, made a mistake, or otherwise failed to provide the professional services you had agreed to, professional liability can help with:

  • Legal investigation and defense
  • Damages and settlements from cases

Professional liability is not the same as general liability, and not all businesses need both. But for those who do, the two can often be bundled together. These are often described as “interlocking coverages” that serve as the baseline for many small businesses.

How to get Alaska business insurance

Getting the business insurance you need to operate legally in Alaska hinges upon if you have employees and how you use a vehicle for work/how the vehicle is titled. In many cases, businesses will need to take out workers’ comp insurance and an auto liability insurance. However, Alaskan businesses will also benefit from a number of other insurance coverages, such as general liability, professional liability, and business equipment insurance.

That’s where we come in.

At Thimble, we’ve revolutionized liability coverage with plans you can purchase by the hour, day, or month. Tailor your plan to your specific needs, so your insurance works when you do. Just download the Thimble mobile app, or click on ”Get a Quote,” and answer three simple questions. From there, we’ll generate an instant quote. You can purchase with a final click and have insurance and Certificates of Insurance (COI) at the ready in less than 60

Then, you’re all set to start your venture in the “final frontier”—we’re rooting for you!

Sources:

  1. Mentalfloss. 25 Wild Facts About Alaska.
  2. U.S. Office of Small Business Administration. Alaska Small Business Economic Profile.
  3. Alaska Department of Labor and Workforce Development. Workers’ Compensation Requirements for Employer.
  4. The Alaska State Legislature. Alaska Statutes 2019.
  5. Alaska Department of Administration, Division of Motor Vehicles. Mandatory Insurance.